President Biden’s new American Jobs Plan outlines a comprehensive approach to improving our nation’s infrastructure while combating the climate crisis, advancing racial equity, and creating millions of good jobs to “build back better” as we recover from the COVID-19 pandemic. Importantly, the plan prioritizes investment in affordable, safe, and efficient homes and businesses, powered by reliable, clean energy. And for the first time, a U.S. president is calling for clean electricity to replace fossil fuels for heat and hot water in homes and buildings, which will help meet President Biden’s goal of reducing the carbon footprint of the U.S. building stock 50 percent by 2035. Enacting this plan will put our country on a path to a better, more efficient future for all.
Investing in the buildings where we live, work, and play is critically important to meeting the president’s commitment to a 100 percent clean energy economy, with zero-energy emissions, no later than 2050. Our nation’s buildings are responsible for about 40 percent of all U.S. carbon emissions, with many low-income communities of color suffering from the impacts of substandard housing and the pollution from the powerplants generating extra electricity to heat and cool them. Consistent with the promises made in the Biden-Harris Build Back Better transition plan, the American Jobs Plan focuses on improving the energy efficiency of America’s buildings and reducing carbon emissions, while ensuring greater availability of affordable housing and creating jobs with opportunities for all Americans.
Affordable, Efficient Housing
We are in the midst of an affordable housing crisis. President Biden is calling on Congress to build, preserve, provide housing assistance to every eligible household and retrofit more than two million homes and commercial buildings. These actions will result in more housing units that affordable, resilient, accessible, energy efficient, and have clean electric heat and hot water. Getting us there will require the use of a wide variety of mechanisms, including tax credits, formula funding, grants, and project-based rental assistance.
The Biden administration is proposing $213 billion in new spending to “help address the growing cost of rent and create jobs that pay prevailing wages.” While some details are still to be revealed, the proposal aims to:
- Produce, preserve, and retrofit more than a million affordable, resilient, accessible, energy efficient, and electrified housing units;
- Build and rehabilitate more than 500,000 homes for low- and middle-income homebuyers;
- Eliminate exclusionary zoning and harmful land use policies;
- Add $40 billion for the Public Housing Capital Fund;
- Create a $27 billion Clean Energy and Sustainability Accelerator to mobilize private investment into areas including residential retrofits; and
- Additional funding for research and development
This plan tackles housing from multiple directions. Low-income families are often forced to rely on inefficient, substandard-quality housing, and are also more likely to live in areas most vulnerable to the effects of climate change. President Biden’s plan addresses resiliency both by improving the efficiency and quality of individual buildings, as well as providing increased federal investment in affordable housing construction. It also targets the system level by eliminating exclusionary zoning such as minimum lot sizes, mandatory parking requirements, and prohibitions on multifamily housing. And when disasters do occur, the Biden plan calls for building back above existing codes and standards, to protect buildings and their residents against future harm.
It is now up to the Administration and Congress to fill in the details.
The affordable housing crisis is in large part a result of an historic overreliance on tax credits to build and maintain affordable housing, leading to market failures. We need Congress to match President Biden’s ambition to help bridge the gap between stagnating wages and rising housing costs. To have a real impact on housing and meet the ambition of President Biden’s plan, Congress should also increase the National Housing Trust Fund to a minimum of $40 billion. It is the only federal housing program that directly supports the development and retrofit of housing for the nation’s lowest-income households. In addition, Congress should fund the Community Development Block Grant Program (CDBG) at a minimum of $15 billion. The CDBG can be a critical resource for neighborhood revitalization and development but is sorely underfunded compared to the need. Fully funding these and other programs will make the goals of President Biden’s plan a reality.
If fully implemented, this agenda will move us a long way towards addressing the climate crisis–while creating millions of jobs–by targeting the urgent need for affordable healthy housing and reduced energy burdens suffered by extremely low-income households, who are disproportionately Black, Indigenous and people of color (BIPOC).
Efficient Electric Heating
As part of the strong focus on affordable housing, the plan calls for increased investments in energy efficient buildings with heat pump technology for heat and hot water. Heat pumps are a critical piece of the climate and affordability solution when paired with an electricity grid that is increasingly powered by low-carbon energy sources like solar or wind power: any heat pump-heated building powered by a clean grid will be responsible for much lower carbon emissions than one that uses fossil fuels. This technology can be deployed not only in housing, but also in schools, commercial buildings, federal buildings, and local municipal buildings to lower energy bills and carbon emissions. In fact, in combination with the grid improvements specified in the plan, efficient electric buildings will be key to meeting the president’s goals of net-zero emissions by 2050.
We also need investment in the technology that will make this efficient electrification affordable and accessible to all. The plan calls for an increase in domestic manufacturing of electric heat pumps for residential heating and commercial buildings. This can be achieved through the plan’s investment in federal buying power, and also through tax credits like an update to section 45M of the tax code, which would provide incentives for manufacturers to produce efficient heat pumps and heat pump water heaters. This type of “upstream” encouragement has a bigger market impact than a consumer tax credit, is a more effective use of taxpayer dollars, and is significantly more equitable because upfront costs are lowered, making this equipment more accessible to all.
Addressing the efficiency, resilience, and quality of our homes and buildings is crucial both to meeting the nation’s climate goals and to ensuring equitable living conditions. By addressing both affordable housing and building efficiency head-on, President Biden’s American Jobs Plan will be transformative for decades to come. We urge Congress to act with haste, for the benefit of all.